Riau may lose the chance to operate CPP oil block

Riau province is required to submit its proposal to operate the Coastal Plain Pekanbaru (CPP) oil block until August, or losing the chance at all, Kompas daily reported on Friday.

Director General of Oil and Gas at the Ministry of Mines and Energy Rachmat Sudibyo said in Jakarta on Wednesday that if the Riau provincial administration did not come with its proposal until August, the government would stick to the three options initially proposed by the ministry.

The ministry initially proposed the province three options in managing the oil block after the current contract, now being held by PT Caltex Pacific Indonesia (CPI), expired in August next year.

Under the three options, the CPP oil block will be operated jointly by Pertamina, Caltex and Riau, by Caltex and Riau, or by Pertamina and Riau. But the provincial administration rejected the three options and instead demanded to operate the oil block in cooperation with companies of its own choices.

The government approved the province's request but it has yet to decide which partners it would take in operating the oil block. The uncertainty has caused a decline in the CPP oil production to about 50,000 barrels per day at present from 78,000 barrels per day previously as the current contractor CPP reduced the spending for the oil production.

Rachmat said that the provincial administration should clearly state in the proposal its partners and other technical aspects in operating the oil block. (*)